Chapter 14 quiz

In the context of the continuity of limited liability companies (LLCs), which of the following statements is true?

In an LLC, a business organization can be an owner.

Which of the following has a perpetual existence so long as the number of shareholders is limited?

S corporation

Which of the following is a taxable entity?

a corporation

A corporation created under the authority of a foreign country may be called a(n) ______.

alien corporation

The ______, by which the corporate veil can be pierced, may also be used to impose personal liability upon corporate officers, directors, and stockholders.

alter-ego theory

A limited liability company is created through filing the ______ with a state official.

articles of organization

While selecting a name for a partnership, if the name is other than that of the partners, the partners must give notice as to their actual identity under the state's ______.

assumed-name statute

To prevent problems that may arise when a partner dies or withdraws from a partnership, the articles of partnership should include a(n) ______.

buy and sell agreement

When organizations are owned by only a few persons, they are said to be ______.

closely held

In a closely held corporation, which of the following lawsuits is likely to be brought by a minority shareholder on behalf of a corporation if the majority is acting illegally or oppresses the rights of the minority shareholders?

derivative suit

A(n) ______ is any change in the ownership of an organization that changes the legal existence of the organization.

dissolution

In the context of factors to consider when selecting a business's organizational form, one of the most significant creation-related issues is

how much paperwork is involved

A corporate charter is issued following an application made by individuals known as ______.

incorporators

Which of the following is required to have its organizers file articles of organization with state official for formation?

limited liability company

Which of the following organizations is equally managed by the members unless a manager is designated?

limited liability corporation

The owners of limited liability companies are called ______.

members

The creation of a(n) ______ is automatic based on business conduct and is modified by agreement.

partnership

Which of the following forms of organization is most easily formed at minimal costs?

partnership

When courts find that a corporate organization is being misused, the corporate entity can be disregarded. This has been called

piercing the corporate veil

The crucial issue with the continuity factor of a business's organizational form is

the method by which the business can be dissolved.